Honda profit surges 40%
Honda reported a 40 percent surge in operating profit in the most recent quarter as a more profitable sales mix and aggressive cost cuts offset foreign exchange losses.
Operating profit climbed to 214.4 billion yen ($1.89 billion) in the fiscal second quarter ended Sept. 30, the automaker announced in its Tuesday earnings report.
Net income advanced 21 percent to 210.7 billion yen ($1.85 billion) in the July-September period. Revenue increased 1.7 percent to 3.84 trillion yen ($33.78 billion), even as worldwide sales declined 3.6 percent to 1.25 million vehicles in the three-month period.
Results rebounded from the same quarter the previous year partly because last year’s earnings were undercut by outlays to cover a class-action settlement involving defective Takata airbag inflators. Profits were not burdened by such a charge in the latest quarter.
North America, one of Honda’s biggest profit centers, also bolstered the company’s performance. North America booked a 53.48 billion yen ($470.4 million) regional operating profit in the quarter, reversing a 660 million yen ($5.81 million) operating loss the year before.
Honda was also able to better tap growing demand for higher-margin crossovers.
“As far as our four-wheeler business goes, we have since last year revised our production system in line with the demand of the market in North America, so that we were able to boost light truck sales," Executive Vice President Seiji Kuraishi said while outlining results.